1Q22 Business Results

April. 2022

Ⅰ . 1Q22 Financial Highlights Ⅱ. Key Takeaways Ⅲ. Financial Analysis Ⅳ. Asset Quality Ⅴ. Financial Highlights of Major Subsidiaries Ⅵ. Appendix

  • 1. The consolidated financial information of KB Financial Group Inc. (the "Group") presented herein is based on the Korean International Financial Reporting Standards(K-IFRS). It is currently being reviewed by the Group's independent auditor, and accordingly, is subject to change.

  • 2. As KB Insurance and KB Capital became wholly-owned subsidiaries of the Group as of July 7, 2017, the financial results of KB Insurance and KB Capital have been fully consolidated in the Group's financial statements since 3Q17.

  • 3. As Prudential Life Insurance became wholly-owned subsidiary of the Group as of August 31, 2020, the financial results have been fully consolidated in the Group's financial statements since September, 2020.

  • 4. From 3Q21, the Group applied accounting policy in accordance the International Financial Reporting Interpretation Committee(IFRIC) agenda decision over K-IFRS No.1019(Employee benefits). However, please note that the financial information for the past period contained herein has not been restated retrospectively.

  • 5. From 1Q22, certain interest expense portion out of the provisioning for insurance policy reserves, which used to be accounted under Other Operating Profit, has been reclassified as interest expenses under Net Interest Income for more practically-meaningful presentation of financial information. Note that consolidated financial results contained herein have been restated retrospectively for better comparison.

  • 6. Total may not sum due to rounding.

2

Group Profitability Overview

bn won, %

Net Interest Income

Net Fee & Commission Income Other Operating Profit

Gross Operating Income G&A Expenses

Provision for Credit Losses Net Operating Profit

Net Non-Operating Profit Profit for the Period

Profit attributable to controlling interests

Group Net Profit Trend 1) (bn won)

Note 1) Based on profit attributable to controlling interests 2) Non-recurring items

CAGR 7.4%

4,410

2017

2018

2019

2020

2021

Highlights

Net Profit for 1Q22

1,453.1 bn

(+14.4% YoY)

Despite impact from high market volatility and rate hikes, 1Q22 net profit increased 14.4% YoY mostly driven by net interest income growth

Net Fee & Commission for 1Q22

915.0 bn

(+3.8% QoQ)

Driven by strong performance of IB, fee & commission income increased 3.8% QoQ even under the sluggish stock market condition and weak sales of products

※ 1Q22 Major non-recurring items (before tax)

  • • (Kookmin Bank) Corporate tax reversals : W69bn

    Net Interest Income for 1Q22

    2,648.0 bn

    (Group NIM +6bp QoQ)

    Net interest income grew 18.6% YoY, led by modest loan growth and NIM expansion. Group NIM improved 6 bps QoQ reflecting key rate hikes

    G&A Expenses for 1Q22

    1,691.8 bn

    (-1.8% YoY)

    G&A expenses slightly downsized YoY despite increasing digitalization costs, which is attributable to persistent cost control efforts and accumulated ERP effects

    Shareholders' Return

    Quarterly Payout

    (1Q DPS 500)

    Officially initiated quarterly dividend program to enhance shareholders' value and visibility of shareholders' return

  • • (Kookmin Bank) Large-scale reversals of provisioning : W59bn

  • • (KB Capital) Reversals of provisioning related to credit review model adjustment : W23bn

Group ROA·ROE (%)

Loans in Won Growth (tn won, %)

NIM (%)

ROA

ROE

ROE(excl. non-recurring items)

Household

Total Growth(QoQ)Corporate Growth(QoQ)

Corporate

Household Growth(QoQ)

Group

Bank

Improvement of fundamentals and profitability

Sustained solid growth in corporate loans

Stronger NIM expansion mostly driven by asset repricing effect

  • • 1Q22 Group ROA and ROE recorded 0.88%, 13.16% respectively

  • • Sustained profitability improvement driven by expanded core earnings and management of cost efficiency and asset quality

  • • Pursue further enhancement through strengthening the competitiveness of non-banking business and securing new growth engines

* ROE : Based on Return on Common Equity, which represents profitability of common equity

  • • 1Q22 Loans in won of the Bank grew 0.8% QoQ, amounting to W321tn

  • • Household loans decreased 1.4% QoQ mostly due to contraction of unsecured loans and sluggish jeonse loans. Meanwhile, corporate sustained solid growth of 3.4% QoQ with balanced increase across the board

  • • Apply quality and profitability-focused lending policy throughout the year, taking into account rates-up cycle and shrinking liquidity conditions

  • • 1Q22 Group NIM and Bank NIM marked 1.91%, 1.66%, up by 6bp, 5bp QoQ respectively, driving solid earnings growth momentum

  • • Stronger quarterly NIM expansion as a result of persistent efforts to enhance yields earned from securities assets as well as asset repricing effect from rate hikes

  • • Pursue further improvement making concurrent efforts to increase low-cost funding deposits

Group Cost Efficiency(CIR) (%)

Credit Cost Ratio(CCR) (%)

Group BIS Ratio (Basel III, %)

CIR

CIR(excl. non-recurring items)

Group

Bank

Excl. non-recurring items

BIS

Tier1

CET1

Sustained enhancement in cost efficiencyStable asset quality amid rates-up cycle and prolonged COVID-19

Industry-highest capital adequacy backed by solid earnings power

  • • 1Q22 Group CIR recorded 45.4% and improved by 4.3%p from 2021, demonstrating enhanced cost efficiency as a result of expanding revenue streams and group wide cost control efforts

  • • When excluding non-recurring items such digitalization, CIR is on the track of downward stabilization

  • • Cost efficiency is expected to further improve as cumulative effects of headcount restructuring get visualized

  • • 1Q22 Group CCR and Bank CCR marked 0.15%, 0.02% respectively, due to one off factors such as reversals of provisioning

  • • Excluding such one off factors, 1Q22 Group CCR recorded 0.23%, maintaining a stable level amid prolonged COVID-19 and rate hikes

  • • Maintain conservative risk management considering escalated credit risk and liquidity condition

  • • 1Q22 Group BIS and CET1 ratios are expected to mark 15.90%, 13.42% respectively

  • • Despite quarterly dividend payout and increased RWA due to corporate loan-driven asset growth, Group maintained robust level of capital adequacy in industry on the back strong earnings generation and strategic capital management including issuance of hybrid bonds

  • • 1Q22 Bank BIS and CET1 ratios are expected to record 17.63%, 15.18%, respectively

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KB Financial Group Inc. published this content on 22 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2022 07:17:09 UTC.